Who is Eligible to Buy a House in the UK? | WIS Mortgages

If you’re an expat and you’re looking into taking out a mortgage from a UK based company – whether you’re planning on buying a property in the UK (where you may not currently be a permanent resident) or overseas (in the country you’re currently residing in), you may be looking into expat mortgages. Others looking into this area can include foreign nationals who are looking to buy property within the UK. This is a relatively unfamiliar area for many of us, so it’s important to do a lot of research before diving into any agreements. Hopefully, some of the following information will help to inform you on expat mortgages, who is eligible to buy a house in the UK and any other information that could come in useful for you!

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What Is an Expat Mortgage?

This may seem relatively straightforward, but it’s important to specify exactly what an expat mortgage is before we go into any further detail on the subject. Put simply, an expat mortgage is a mortgage that is aimed specifically at people who are living overseas and who want to buy a property either in their original home country, in the country they are currently residing in as a foreign residency, or foreign nationals who are looking for a mortgage within the UK. Of course, securing an expat mortgage tends to be a little more difficult than securing a standard mortgage. This is because mortgage providers generally deem expats to be more of a financial risk than standard residents.

Are There Major Differences Between Expat Mortgages and Standard Mortgages?

Realistically speaking, there isn’t all too much of a difference between expat mortgages and standard mortgages. Both see a professional lender provide an individual with the money they need to purchase a house that they want. The recipient will then pay the lender back in regular instalments with added interest. The main difference between expat mortgages and standard mortgages is that expat mortgages tend to have a more stringent application and approval process in place. Checks and eligibility requirements are likely to be more difficult to pass.

Who Is Eligible to Buy a House in the UK?

Of course, if you’re planning on getting an expat mortgage, you first need to ensure that you’re eligible to buy a house in the UK. When it comes down to it, regulations are relatively flexible and lenient. UK residents and citizens can buy property within the UK and foreign nationals can also buy property within the UK. There are no legal restrictions on expats or foreign nationals buying property. However, it’s important to note that foreign nationals are often expected to have around two years’ worth of residency in the UK and a job within the UK. Those without this may face more stringent requirements and may have to put down a much larger deposit. In terms of overall costs, the price of property will be the same for residents and non-residents alike. Stamp duty will be paid at the same rate and Capital Gains Tax will be paid at the same rate.

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Criteria for Expat Mortgages

If this sounds good to you and you are interested in moving forward with buying a house in the UK, you are likely to next be interested in common criteria for expat mortgages. Here are some challenges that expats are likely to face when applying for an expat mortgage.

Credit History
All lenders will check your credit history when you apply to borrow money. This goes from something as small as a phone contract, so it’s not all too surprising that mortgage lenders are going to want in-depth insight into your credit history before handing over a large amount of money to you. This is likely to be relatively straight forward if you are only recently an expat. However, if you have been an expat for a long period of time, your UK credit history may be a little more difficult to trace.

Any mortgage lender is going to want to see proof of your income before agreeing to offer you a mortgage. Generally speaking, lenders tend to consider expats higher risk than standard applicants, as there may be different employment rights and regulations overseas that could cause your income to be less reliable. If you have difficulty proving your income, your application may be rejected.

Closely tied to income is employment. If you are employed overseas, mortgage lenders are more likely to approve your application if you’re working for an international company rather than a local or remote company. They are also likely to request that payslips and other documents highlighting proof of earnings are translated into English. Finally, some lenders may require that your income is paid into an English bank account, rather than an overseas bank account.

If you are self-employed and looking for approval on an expat mortgage, the usual self-employed criteria for mortgages will be required. But on top of this, you will also likely have to show that you are using the services of an internationally recognised accountant.

Factors That Can Impact Expat Mortgages

We’ll finish up by highlighting a few factors that can impact expat mortgages!

  • Taxation – it’s important that you consider the amount of tax that you will be liable to pay in association with your mortgage. This could include both UK taxes and taxes in your country of residence.
  • Exchange Rates – a small change in exchange rates could drastically impact the value of your property. It’s important to be aware that unexpected changes to exchange rates could make your property suddenly unaffordable.
  • Translation – the paperwork involved in buying a property is extremely complex. It’s essential that everything is translated properly to ensure that you clearly know what you’re contracting yourself into.

Of course, there’s a lot more to expat mortgages than has been outlined above. But these basics should help to cover some essential information and eligibility criteria to get the ball rolling in the right direction. Hopefully, some of this comes in useful for you!

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up the mortgage repayments.

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